The European game's governing body has set up a working group which will meet in Geneva on Monday to discuss how to extend its licensing system and restrict the levels of debt that clubs are permitted to operate with. Currently the financial stipulations in Uefa's system are limited to bans on clubs who have outstanding debts on transfer payments. It also states that staff should be paid on time.

But the proposals being drawn up by Uefa's general secretary, David Taylor, and its president, Michel Platini, would see the system delve far deeper into the financial workings of clubs. "The ultimate sanction is not to be in our competitions," Taylor said yesterday.

He explained that debts fixed against assets, for stadium building, are considered more acceptable than those run up in the acquisition of players or for takeovers. He confirmed that this would affect clubs such as last season's Champions League finalists, United and Chelsea, and one of the semi-finalists, Liverpool, unless they significantly reduced their debts.

"It won't happen this year, it won't happen next year but, yes, that could happen in years to come," he said, speaking at the Leaders in Football conference yesterday, which coincidentally was being held at Stamford Bridge. "Some of us believe it shouldn't be an absolutely free market and we are in favour of controlled regulation. An increasing number of people in football believe we have to do more. There are some excellent examples of those who support the system, and Arsène Wenger is one of the strongest supporters of the need to do more."

It is hardly surprising that the Arsenal manager, who has labelled the trend for clubs to borrow excessively for strengthening as "financial doping", should favour the proposals. But the clubs Taylor was referring to reacted more cautiously, all demanding that they be consulted extensively before the new licensing conditions come into force. "There's been a number of proposals, mostly emanating from Uefa but also from elsewhere, looking at clubs and the amount of debt they have," said Chelsea's chairman, Bruce Buck. "It's really hard to react to those in a vacuum until you see the very specifics of what the proposals are.

"We are willing to sit down with Uefa and talk about not just debt but lots of other things. Companies in this world borrow money - that is a fact of life. I don't think there is anything wrong as a general proposition in football clubs borrowing money. But it has to be in the context of their revenue stream and the rest of their capitalisation."

Although, according to Deloitte, Chelsea have net debts of £620m, a figure derived from their most recent accounts to June 30 2007, Buck refers to the £578m that the owner, Roman Abramovich, has placed in interest-free loans as "softer than soft debt. It's as good as equity".

But United can make no such claims about their complicated structure of borrowings, amounting to £605m according to Deloitte. Although their most punitive debt - preference shares running at double-digit interest rates with hedge funds - is secured against equity belonging to the club's owner, the Glazer family, Uefa's rules would be aimed at reducing the entire debt burden.

United refused to comment yesterday but their position on Uefa's threat was made clear by the chief executive David Gill a few months ago. "The issue with debt is whether you can service it," he said. "It is not about what it is. As far as we are concerned, there is no issue." But Taylor countered: "It is not up to you, if you want to compete in our competitions."

Platini also warned England's clubs yesterday that they were in danger of losing their identity because of the influx of foreign owners into the Premier League. "Do you want in Liverpool an Arab sheikh as president with one Brazilian coach and nine or 11 African players?" he said. "Where is Liverpool in that? We have to make some rules."

The president said that the question of foreign owners - some of whom have saddled their clubs with huge debts - was a matter for the British government but that Uefa was looking at ways of introducing Europe-wide regulations. Speaking before his induction into the National Football Museum's European hall of fame he said: "You have to have identity, that is where football's popularity lies. If you bring some people from Qatar and there is no one from Liverpool or Manchester on the pitch or in the company, where is Liverpool or Manchester?"